A Look at 2014’s Top Stories
by Robin Amster and Andrew SheivachmanAs the travel agent community looks ahead to the new year, it may be instructive to pause for a look back at the past year.
2014 had ups and downs, periods of calm, times of uncertainty, and more than enough significant developments that affected agents in various ways.
Here’s Travel Market Report’s take on the top stories for 2014.
Gaining Respect—and Business: Agents are Back
The unmistakable buzz about the ‘return’ of travel agents was confirmed—with hard figures—in 2014.
Agents are expected to realize their highest profit margins in more than half a dozen years, according to an exclusive report released by ASTA and Travel Market Report.
In 2014, the agency business was the strongest its been in years with close to nine out of 10 agents who expected to end 2014 in the black, said the report, Making Tough Business Decisions: Indispensable Research for Measuring Travel Agency Success. ASTA agents projected an average profit margin of 9% for the year, up from 7% in 2013 and from the recent low of 6% in 2010.
MMGY Global provided further proof of this positive development in its 2014 Portrait of American Travelers which found an impressive 50% increase from 2013 to 2014 in the number of respondents who booked trips with an agent.
And in an encouraging sign for the future, the same study said that more millennials—the 18- to 34-year-old generation—booked with agents during the year than any other generation.
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Millennials Warming Up to Agents
CLIA Restructures . . . Never a Dull Moment in the Cruise Industry
Following a few years of strife in the cruise industry, 2014 promised to be a return to form for CLIA as it focused on strengthening its value proposition for agents.
The association announced a major overhaul to its membership structure in September, offering value adds from member cruise lines along with increased educational opportunities for agents.
CLIA, however, will also require agents to register individually with it in order to receive all the new benefits. Agents had mixed reactions to the new structure, saying it lacked specificity but could offer support to less experienced agents.
The news didn’t stop there.
There was a major transition in CLIA’s leadership. After a three-year tenure, Christine Duffy resigned her post as CLIA president to become president of Carnival Cruise Lines. Her departure follows the resignation a month earlier of Dwain Wall, CLIA’s vice president of agent and trade relations.
The association also announced it will shutter its Fort Lauderdale, Fla. headquarters, move to offices in Washington D.C. office, and streamline its staff in 2015.
The new year should be a pivotal one in CLIA’s history. Industry observers said the association will either show its true commitment to the travel agent community, or continue primarily in its role as the cruise industry’s legislative representative.
CLIA’s New Membership Structure Focuses on Individual Agents
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NDC: Dazed, Confused . . . and Angered
IATA’s controversial New Distribution Capability (NDC) confused and angered many parties in the travel industry when it was proposed to the Department of Transportation (DOT) back in 2013.
But NDC is here to stay with its approval by DOT last August.
“Bigger and more impactful than the elimination of commissions and at least equal to the arrival of automation itself,” is how Paul Ruden, ASTA senior vice president, legal and industry affairs, described NDC in 2013.
ASTA was among several industry groups, including the GDSs, opposed to NDC. The opposition maintained NDC would enable airlines to demand travelers’ personal information before quoting air fares. Other issues included questions about data ownership and compatibility with existing systems.
However, IATA and the Open Allies for Airfare Transparency—one of the opponents to NDC—came up with several conditions that paved the way for DOT’s approval of NDC. The GDSs too are now onboard.
DOT Approves IATA’s New Distribution Capability
IATA Predicts 2016 Rollout for NDC
GDSs on New Distribution Plan: We’re Willing to Play
New DOT Rules, Issues Abound
The Department of Transportation (DOT) last fall introduced its third set of consumer protection rules that would extend its jurisdiction across the internet and further into travel agency operations.
Responses to the rules broke out along predictable lines.
One of ASTA’s major goals, for instance, was to obtain a DOT rule that would require the airlines to make all of their ancillary services available for sale by travel agents. Instead, the DOT proposed that the airlines display to agents the fees and terms for three particular services but not make them bookable. The services include first and second checked bags, carry-on bags and advance seat selection.
The reaction: ASTA claimed DOT’s proposal didn’t go far enough, while the airlines called the list arbitrary.
There hasn’t been a resolution to the debate and DOT hasn’t come out with a target date for taking any action.
Response to DOT’s Proposed Rules Falls Along Predictable Lines
ASTA: New DOT Rules a Mixed Bag
Millennials and Travel: Surprisingly Good News
For all the talk of new markets and niches for travel agents, perhaps none has as much potential as the 18- to 34-year old generation, dubbed millennials.
It’s come as a pleasant surprise that, despite the perception that this generation books the majority of its travel online, there was growing evidence in 2014 that millennials crave the conversation and the support that can only come from experienced travel agents.
Studies found that millennials travel more than other generations, although they spend less on each trip.
But if millennials continue to travel while their spending power increases over time, they stand to become a significant part of agents’ client mix.
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Millennials Travel More, But Spend Less . . . For now
Social Media is Stronger Than Ever, Technology Gaining Ground
Social media continued its growing importance in travel agents’ personal and business lives in 2014 while technology promises to change how clients travel and how agents do business in this wired world.
Travel executives and marketing experts alike continued to encourage agents to build community online and attract new clients in the process.
They provided Travel Market Report readers with a range of advice from how to create a page and start a conversation around an agency’s specialties to copious post ideas for agents unfamiliar with the world of social media.
For clients, travel technology is offering a host of innovations from itineraries, maps, guidebooks, cameras and more that are available on smart phones, to apps that help travelers with everything from finding their way through an airport to comparison shopping for a restaurant.
Hotels and cruise lines are fueling life online by offering Wi-Fi and a host of other tech tools to travelers.
For technologically savvy agents—or those that want to be—there’s a growing supply of information on programs, apps and extensions aimed at streamlining agents’ digital lives.
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Tech Tools for Doing Business in the Cloud
More Global Crises . . . In Other Words, Business as Usual
While travel thrived in 2014, political turmoil, air disasters and health scares around the globe often affected travel agents and their clients.
The conflict in Ukraine led to the downing of a Malaysia Air passenger jet last summer, which in turn led to Western sanctions against Russia. An additional Malaysia Air jet went missing over the Pacific while just last month an AirAsia craft dropped from the sky.
Also last summer, air travel to Israel was temporarily interrupted after the FAA banned airlines from flying into or out of Tel Aviv’s international airport following a rocket strike near the airport. The ban was promptly lifted and, following an end to the conflict between Israel and Hamas, travel and tourism resumed at a healthy pace.
For the Mexican resort of Cabo San Lucas, it was nature that severely affected tourism. Hurricane Odile ravaged the resort last fall but re-building efforts began immediately.
A crisis of a different sort broke last fall when the Ebola epidemic in West Africa chilled travel to the region, raising concerns about the role of air travel as a possible catalyst in the spread of the virus. Cruise lines as well were impacted when it was learned that a passenger aboard the Carnival Magic had been exposed to the virus.
Still, the travel industry once again proved resilient as the events of 2014 took their place along side past events that temporarily shook the industry.
